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28.07.17

Labour demands NAO inquiry into NHS Professionals privatisation

The Labour Party has today announced that it has asked for an inquiry to be launched into the privatisation of an NHS staffing agency that manages more than 90,000 people.

In a letter written by Labour health minister Justin Madders to Amyas Morse, auditor general of the National Audit Office (NAO), the government was accused of pushing a deal to sell off NHS Professionals (NHSP) “behind closed doors”.

Madders explained that NHSP saves the taxpayer around £70m a year by organising last-minute or replacement staffing for trusts in England, as well as ensuring that hospitals don’t have to rely on expensive private agencies. He thus argued it makes little sense to sell it off to private firms, which are reportedly only offering the government £50m for a 75% share.

According to media reports, the deal, which has garnered the interest of six corporations, could be pushed through by the end of August this year, so Parliament will have no time to debate the proposals given the House is now on summer recess.

“This deal is being pushed through behind closed doors with very little clarity for Parliament, taxpayers, NHS patients, or the staff employed at NHS Professionals about what the sale will mean for the future of the organisation,” Madders wrote.

“Since the sale was announced in November, government ministers have repeatedly refused to answer questions about the reasons for the sale, citing commercial sensitivity.

“There is significant public interest in the future of NHS Professionals, and the government should not be able to push through a deal without public scrutiny. I am therefore asking whether you will consider launching an inquiry into whether the sale is really securing the best use of public money,” he continued.

“In particular I would ask that you examine the business case that has been produced to ascertain a better understanding of what additionality the private sector can bring to what, on the face of it, is already a successful organisation.”

Madders went on to argue that key questions still left to be answered by the Department of Health include what investment is expected to be made by the private sector, what return is anticipated and, fundamentally, what it is about the investment and its return that has to be done by the private sector.

In a written answer to a Parliamentary question from former shadow health secretary Heidi Alexander about the bid, health minister Philip Dunne wrote earlier this month: “The aim of this transaction is to ensure that NHSP has the technology, investment, skills and experience to grow for the benefit of both NHS patients and NHS staff. The key commercial feature of the potential transaction is that the company must act to maintain a business model based on supplying high-quality healthcare staff at low margins, to NHS clients. Breach of this principal would give the department the right to repurchase its shares.

“The new majority shareholder would run and control the company, but the minority stake retained by the department would allow it to benefit from future increases in the value of the company and also give the department a seat on the board and oversight of its plans and operations.”

But in his letter, Madder concluded: “Purchasing shares back at an additional cost to the taxpayer, following presumably a period during which NHSP have been generating excess profit from the taxpayer seems to create a double benefit to the private sector and a double risk to the taxpayer which needs to be examined.”

A Department of Health spokesperson, however, maintained that the government’s objective “is to improve patient care by reducing agency spend” – whose bill came down by £700m last year, with NHSP helping save £70m by supplying staff at more affordable rates – and that any decisions made will be predicated on that objective.

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